THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER
EITHER THE SECURITIES ACT OF 1933 OR APPLICABLE  STATE  SECURITIES  LAWS AND MAY
NOT BE SOLD, TRANSFERRED,  ASSIGNED,  OFFERED,  PLEDGED OR OTHERWISE DISTRIBUTED
FOR VALUE UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
SUCH LAWS  COVERING  SUCH  SECURITIES,  OR THE  COMPANY  RECEIVES  AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE, TRANSFER,  ASSIGNMENT,
OFFER,  PLEDGE OR OTHER  DISTRIBUTION  FOR VALUE IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

                                  QUANTECH LTD.

$_______________                                           ______________, 1997
                                                                (Date of Issue)

         1.  The  Convertible  Note.  Quantech  Ltd.,  a  Minnesota  corporation
(hereinafter  the "Company")  promises to pay to the order of  (hereinafter  the
"Holder"),  at the Holder's  address as  registered  with the Company or at such
other place as the Holder may designate in writing from time to time, Dollars ($
), in legal tender of the United  States,  with interest  accruing on the unpaid
principal  balance  as of the date  hereof  at the rate of  ___________  percent
(______%)  per annum (which is equal to five percent (5%) plus the Prime Rate as
quoted in the Wall Street Journal on the date hereof).  The entire principal and
accrued  interest on this  Convertible Note shall be due and payable in full, in
cash, on the earliest to occur of (i) June 1, 1998,  (ii) the  completion by the
Company of its next private or public equity financing with gross proceeds of at
least $5,000,000 ("Financing") or (iii) the completion of any sale or conveyance
to  another  corporation  of the  property  of the  Company  as an  entirety  or
substantially as an entirety ("Sale"),  (iv) the completion of any consolidation
or  merger  to  which  the  Company  is a party  or any  statutory  exchange  of
securities  with  another  corporation   (including  any  exchange  effected  in
connection with a merger of a third corporation into the Company) ("Merger"), or
(v) the execution of any  licensing  arrangement  in  connection  with which the
Company provides the right to control a significant  portion of its business and
receives  cash in  excess  of  $5,000,000  upon  execution  of such  arrangement
("Licensing"). Interest shall be computed on the basis of actual days elapsed in
a year of three hundred sixty (360) days.  With 20 days' written notice from the
Company,  the indebtedness  evidenced by this Convertible Note may be prepaid in
whole or in part at any time without penalty or premium, but partial prepayments
shall be applied  first to  accrued  interest  payments  owing  hereunder.  This
Convertible Note is delivered by the Company in accordance with the Subscription
and Loan Agreement of even date herewith entered into by the Holder and accepted
by the Company.

         2.  Subordination.  This  Convertible  Note is secured by the Company's
assets as set forth in the Security  Agreement of even date herewith.  The terms
of this Convertible Note are subject to the terms of the Security  Agreement and
Inter-Creditor Agreement each dated of even date herewith. The Company covenants
and  agrees,  and each  Holder of the  Convertible  Note by  acceptance  thereof
covenants  and agrees,  that the payment of the principal of and the interest on
the Convertible  Note is hereby  expressly  subordinated and made subject to the
prior payment in full of all indebtedness of the Company outstanding on the date
hereof or hereafter  incurred (i) for money  borrowed by the Company from banks,
finance companies, trust companies, pension trusts, insurance companies or other
financial institutions; (ii) in connection with the issuance of tax exempt notes


<PAGE>

or debentures; and (iii) in connection with the acquisition of capital equipment
(collectively,  the "Senior Debt").  By acceptance of the Convertible  Note, the
Holder expressly agrees that Agent appointed in the Inter-Creditor Agreement has
the authority to execute  subordination  agreements on behalf of the Holder with
holders of the Senior Debt.

         3.  Transferability.  The Convertible Note may be converted into Common
Stock of the Company  pursuant to the terms of Section 6 hereof (the "Conversion
Shares"), and the Convertible Note and the Conversion Shares may be transferred,
subject to the  following  conditions.  The Holder of the  Convertible  Note, by
acceptance  thereof,  agrees to give written  notice to the Company at least ten
(10)  days  before   transferring  or  converting  the   Convertible   Note,  or
transferring any Conversion Shares, of such Holder's intent to do so, describing
briefly  the  manner of the  proposed  transfer  or  conversion.  Promptly  upon
receiving  such written  notice,  the Company  shall present  copies  thereof to
counsel for the Company.  If, in the opinion of counsel satisfactory in form and
substance to the Company,  the proposed  transfer or conversion  may be effected
without  constituting a violation of the applicable federal and state securities
laws, such Holder shall be entitled to transfer or convert the Convertible  Note
or to  dispose  of  the  Conversion  Shares  received  upon  conversion  of  the
Convertible Note as contemplated in the above referred to notice provided by the
Holder to the Company,  provided that an  appropriate  legend may be endorsed on
the  Convertible  Note  or the  certificates  for any of the  Conversion  Shares
respecting  restrictions  on transfer  thereof  necessary  or  advisable  in the
opinion of counsel  satisfactory in form and substance to the Company to prevent
further  transfers  which  would  be in  violation  of the  securities  laws  or
adversely affect the exemptions relied upon by the Company.  To such effect, the
Company may request  that the  intended  transferee  execute an  investment  and
representation  letter  satisfactory in form and substance to the Company.  Upon
transfer of the Convertible Note or any Conversion  Shares,  the transferee,  by
acceptance of the Convertible Note or Conversion  Shares,  agrees to be bound by
the provisions,  terms,  conditions and limitations of the Convertible  Note and
the investment and  representation  letter, if any, required by the Company.  If
(a) no opinion of counsel  referred to in this Section has been  provided to the
Company, or (b) in the opinion of such counsel the proposed transfer, conversion
or disposition of the Convertible Note or the Conversion Shares described in the
Holder's  written  notice  given  pursuant  to this  Section may not be effected
without  registration or without adversely  affecting the exemptions relied upon
by the Company,  the Holder will limit its activities and restrict its transfer,
conversion or disposition accordingly.

         4.  Exchange  of  Convertible  Note.  At any time at the request of any
Holder  of the  Convertible  Note and upon  compliance  with the  provisions  of
Section 3 above and surrender of such  Convertible  Note for such purpose to the
Company  at its  principal  office  or such  other  office  or  agency as it may
authorize for such purpose,  the Company at its expense (except for any transfer
tax arising out of the exchange) shall execute and deliver in exchange  therefor
a  new  Convertible   Note  or  Convertible   Notes,  in  the   denomination  or
denominations  ($1,000 and integral multiples thereof only, plus one Convertible
Note in a lesser  denomination  if required)  as such Holder may request,  in an
aggregate  principal  amount equal to the unpaid portion of the principal amount
of the Convertible Note surrendered and substantially in the form thereof, dated
as of the date of the Convertible Note so surrendered and payable to or upon the
order of such Holder.

         5.   Replacement  of  Convertible   Note.   Upon  receipt  of  evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of the

<PAGE>

Convertible  Note and in the case of any such loss,  theft or destruction,  upon
delivery of a bond of indemnity  satisfactory to the Company if requested by the
Company, or in the case of any such mutilation,  upon surrender and cancellation
of such  Convertible  Note,  the  Company  shall  issue a new  Convertible  Note
identical in form to the lost, stolen, destroyed or mutilated Convertible Note.

         6.       Conversion of Convertible Note.

                  (a) Right of Conversion.  Subject to and upon  compliance with
the  provisions  of  Section  3 above  and  this  Section,  the  Holder  of this
Convertible  Note or any Convertible  Notes issued in exchange for it shall have
the  right  at any time  after  the  Conversion  Price  (as  defined  below)  is
determined  and prior to the payment in full of this  Convertible  Note,  at the
Holder's  option,  to convert the principal  amount of any such Convertible Note
(with accrued interest up to the date of conversion to be paid in cash in full),
or any portion of such principal amount which is $1,000 or an integral  multiple
thereof, into that number of fully paid and nonassessable shares of Common Stock
of the Company  obtained by dividing  the  principal  amount of the  Convertible
Note, or portion  thereof to be converted,  by the Conversion  Price (as defined
below),  subject to  adjustments  as  provided  herein and by  surrender  of the
Convertible  Note,  such  surrender  to be made in the manner  provided  in this
Section.  For purposes of this Convertible Note, the "Conversion Price" shall be
equal to the  lesser of (a) $.25 per  share,  (b) the  average  of the last sale
price of the Company's Common Stock for each of the 10 consecutive  trading days
immediately preceding December 20, 1997 or (c) the price per share determined as
follows:  (i) 80% of the per share  price at which any  shares of the  Company's
Common  Stock are sold in a  Financing  which is prior to the closing of a Sale,
Merger or Licensing  (as such terms are defined  below),  or (ii) in the case of
any Sale which is prior to the closing of a Financing,  Merger or Licensing, 80%
of the per share consideration the shareholders of the Company would be entitled
to  receive  if there  was a  distribution  to the  shareholders  (assuming  the
exercise of outstanding  "in-the-money" options and Convertible Notes, including
this Convertible Note) of proceeds from the Sale, or (iii) in case of any Merger
which is prior to the  closing of a  Financing,  Sale or  Licensing,  80% of the
average  of the  last  sale  price  of the  Company's  Common  Stock  for the 20
consecutive  trading days immediately  following the public  announcement of the
Merger,  or (iv) in the case of any Licensing which is prior to the closing of a
Financing,  Sale or  Merger,  80% of the  average  of the last sale price of the
Company's Common Stock for the 20 consecutive trading days immediately following
the  public  announcement  of the  Licensing,  or (v) in the  event  there is no
Financing, Sale, Merger or Licensing prior to June 1, 1998, the Conversion Price
shall be the  lower of (A) 80% of the  average  of the  last  sale  price of the
Company's  Common Stock for each of the 20 consecutive  trading days immediately
preceding the issuance of this Convertible Note or (B) 80% of the average of the
last sale price of the  Company's  Common  Stock for each of the 20  consecutive
trading days prior to June 1, 1998.

                  (b) Conversion  Price,  Subject to Adjustment.  The Conversion
Price shall be subject to adjustment from time to time as hereinafter  provided.
Upon each  adjustment of the Conversion  Price,  the Holder  thereafter  will be
entitled  to receive the number of shares of Common  Stock  obtained by dividing
the then effective  Conversion Price by the Conversion Price resulting from such
adjustment.

                  (c) Stock Split or Combination.  In case the corporation shall
at any time  subdivide  or split its  outstanding  Common  Stock  into a greater

<PAGE>

number of  shares,  the  Conversion  Price in effect  immediately  prior to such
subdivision or split shall be  proportionately  reduced,  and conversely in case
the outstanding Common Stock of the corporation shall be combined into a smaller
number of  shares,  the  Conversion  Price in effect  immediately  prior to such
combination shall be proportionately increased.

                  (d)  Capital  Reorganization,  Merger,  Etc.  If  any  capital
reorganization or reclassification  of the capital stock of the corporation,  or
consolidation or merger of the corporation with another corporation, or the sale
of all or  substantially  all of its  assets  to  another  corporation  shall be
effected in such a way that Holders of Common Stock shall be entitled to receive
stock,  securities  or assets with respect to or in exchange  for Common  Stock,
then, as a condition of such  reorganization,  reclassification,  consolidation,
merger or sale, lawful and adequate  provision shall be made whereby the Holders
shall thereafter have the right to receive upon the basis and upon the terms and
conditions  specified  herein and in lieu of the Common Stock of the corporation
immediately  theretofore receivable upon the conversion of the Convertible Note,
such  shares of stock,  securities  or assets as may be issued or  payable  with
respect to or in exchange  for a number of  outstanding  shares of Common  Stock
equal to the number of shares of Common Stock immediately theretofore receivable
upon  the  conversion  of  the   Convertible   Note  had  such   reorganization,
reclassification, consolidation, merger or sale not taken place, and in any such
case  appropriate  provision  shall  be made  with  respect  to the  rights  and
interests  of the  Holders  to the end that  the  provisions  hereof  (including
without limitation provisions for adjustments of the Conversion Price and of the
number of shares  receivable upon the conversion of the Convertible  Note) shall
thereafter  be  applicable,  as nearly as may be, in  relation  to any shares of
stock,  securities or assets  thereafter  receivable  upon the conversion of the
Convertible  Note.  The  corporation  shall not effect  any such  consolidation,
merger  or  sale,  unless  prior  to  the  consummation  thereof  the  surviving
corporation (if other than this  corporation),  the  corporation  resulting from
such  consolidation  or the  corporation  purchasing such assets shall assume by
written  instrument  executed and mailed to the  registered  Holders at the last
address  of  such  Holders  appearing  on  the  books  of the  corporation,  the
obligation to deliver to such Holders such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such Holders may be entitled to
receive.

                  (e)  Notice  of  Adjustment  of  Conversion  Price.  Upon  any
adjustment of the Conversion  Price,  then and in each such case the corporation
shall give  written  notice  thereof,  by  first-class  mail,  postage  prepaid,
addressed to the registered Holders affected by such adjustment at the addresses
of such  Holders as shown on the books of the  corporation,  which  notice shall
state the Conversion  Price  resulting from such  adjustment and the increase or
decrease,  if any,  in the  number of shares  receivable  at such price upon the
conversions  of the  Convertible  Note,  setting forth in reasonable  detail the
method of calculation and the facts upon which such calculation is based.

                  (f)      Other Notices.  In case at any time:

                           (i)      the corporation  shall pay any dividend  
payable in stock upon its Common Stock or make any distribution (other than 
regular cash dividends) to the Holders of its Common Stock;

<PAGE>

                           (ii)     the  corporation  shall offer for 
subscription  pro rata to the Holders of its Common Stock any additional shares
of stock of any class or other rights;

                           (iii)    there shall be any capital reorganization,
reclassification  of the capital stock of the corporation,  or consolidation or
merger of the corporation  with, or sale of all or substantially all of its
assets to another corporation; or

                           (iv)     there shall be a voluntary or involuntary
dissolution,  liquidation or winding up of the corporation;

         then,  in any one or more of said  cases,  the  corporation  shall give
written notice, by first-class mail,  postage prepaid,  addressed to the Holders
at the  addresses of such Holders as shown on the books of the  corporation,  of
the date on which  (aa) the  books of the  corporation  shall  close or a record
shall be taken for such dividend,  distribution or subscription  rights, or (bb)
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation  or winding up shall take  place,  as the case may be.  Such  notice
shall also  specify the date as of which the  Holders of Common  Stock of record
shall  participate in such dividend,  distribution  or subscription  rights,  or
shall be  entitled  to  exchange  their  Common  Stock for  securities  or other
property deliverable upon such reorganization, reclassification,  consolidation,
merger, sale,  dissolution,  liquidation or winding up, as the case may be. Such
written  notice  shall be given at least 20 days prior to the action in question
and not less  than 20 days  prior to the  record  date or the date on which  the
corporation's transfer books are closed in respect thereto.

                  (g)  Surrender of  Convertible  Note. In order to exercise the
conversion  privilege,  the Holder of the  Convertible  Note to be  converted in
whole or in part shall  surrender  such  Convertible  Note to the Company at its
principal  office or at such other  agency  maintained  for such  purpose by the
Company,  and shall give written  notice to the Company at such office or agency
that the Holder elects to convert such  Convertible  Note or the portion thereof
specified  in said  notice.  Such  notice  shall  also  state the name or names,
together with address or addresses, in which the certificate or certificates for
shares of Common  Stock  which shall be  issuable  on such  conversion  shall be
issued. The Convertible Note surrendered for conversion shall, unless the shares
issuable  on  conversion  are to be  issued  in the same name as the name of the
original Holder, be accompanied by instruments of transfer, in form satisfactory
to the Company,  duly executed by each Holder of his duly  authorized  attorney.
After the surrender of such  Convertible  Note, as aforesaid,  the Company shall
issue and shall  deliver  at such  office  or agency to such  Holder,  or on his
written order, a certificate  or  certificates  for the number of full shares of
capital stock issuable upon the conversion of such  Convertible  Note or portion
thereof in  accordance  with the  provisions  of this  Section.  Any  fractional
interest in respect of a share arising upon such conversion  shall be settled as
provided in Subsection (c) of this Section.  In case any  Convertible  Note of a
denomination  greater than $1,000 shall be surrendered  for partial  conversion,
the Company shall pay the remaining unconverted balance in cash.

                  (h)      Fractional   Shares.  No  fractional  shares  of
Common  Stock  shall  be  issued  upon conversion of the  Convertible  Note. 
Any portion of the  Convertible  Note not  convertible  into a whole share of
Common Stock shall be paid in cash.

<PAGE>

         8.       Events  of  Default.  Each of the  following  events shall be
an Event of Default ("Event of Default") for purposes of the Convertible Note:

                  (a) Convertible  Note Terms.  The Company  defaults in the due
and punctual  performance or observance of any material  terms  contained in the
Convertible  Note,  and such  default  continues  for a period  of  thirty  (30)
consecutive  days after written  notice  thereof to the Company by any Holder of
the  Convertible  Note or Common Stock issued upon conversion of the Convertible
Note; except that any default occurring due to the failure of the Company to act
in  accordance  with Section 8(b) hereof will result in an immediate  default by
the Company  and such  default may be waived by the Holders of a majority of the
total  principal   amount  of  the  then   outstanding   Convertible   Notes  in
substantially the same form as this Convertible Note; or

                  (b)  Insolvency  Matters.  The Company makes an assignment for
the benefit of creditors, or admits in writing its inability to pay its debts as
they become due, or files a voluntary petition in bankruptcy,  or is adjudicated
a bankrupt or insolvent,  or files any petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future  statute,  law or  regulation,  or
files  any  answer  admitting  or fails to deny the  material  allegations  of a
petition filed against the Company for any such relief,  or seeks or consents to
or acquiesces in the  appointment of any trustee,  receiver or liquidator of the
Company or all or any substantial part of the properties of the Company,  or the
Company or its directors or majority stockholders take any action looking to the
dissolution or liquidation of the Company.

         9. Remedies on Default.  Upon the  occurrence of an Event of Default as
described  under  Section 8 hereof,  the Holder may (a)  declare  the  principal
amount hereof and all accrued but unpaid  interest  thereon  through the date of
the  Company's  full  payment  hereof,  to be  immediately  due and payable upon
written  notice from the Holder to the Company;  (b) exercise and enforce any or
all rights and  remedies  available  upon  default to a secured  party under the
Uniform  Commercial  Code;  (c)  exercise or enforce any or all other  rights or
remedies  available to each Holder  hereof by law or  agreement  pursuant to the
terms of the Security Agreement, against the Company or against any other person
or property.

         10.      Registration Rights.

         (a) If at any time after the date of this Convertible Note and prior to
the end of the one-year period following  complete  exercise of this Convertible
Note or __________________________,  2003, whichever occurs earlier, the Company
proposes  to  register  under  the  1933 Act  (except  by a Form S-4 or Form S-8
Registration  Statement or any successor  forms thereto) or qualify for a public
distribution under Section 3(b) of the 1933 Act, any of its securities,  it will
give written notice to all Holders of this  Convertible  Note and any Conversion
Shares of its intention to do so and, on the written  request of any such Holder
given within twenty (20) days after  receipt of any such notice  (which  request
shall specify the interest in this  Convertible  Note or the  Conversion  Shares
intended to be sold or disposed of by such Holder and describe the nature of any
proposed  sale or other  disposition  thereof),  the  Company  will use its best
efforts to cause all such  Conversion  Shares,  the  Holders of which shall have
requested the  registration  or  qualification  thereof,  to be included in such
registration statement proposed to be filed by the Company;  provided,  however,
that if a greater number of Conversion  Shares is offered for  participation  in
the proposed offering than in the reasonable opinion of the managing underwriter
of the proposed  offering can be accommodated  without  adversely  affecting the

<PAGE>

proposed  offering,  then the amount of Conversion Shares proposed to be offered
by such Holders for  registration,  as well as the number of  securities  of any
other  selling  shareholders   participating  in  the  registration,   shall  be
proportionately  reduced  to  a  number  deemed  satisfactory  by  the  managing
underwriter.

         (b)  Further,  on a one-time  basis  only,  provided  Form S-3, or such
successor  form  as may be  adopted,  is  available,  during  the  term  of this
Convertible  Note,  upon  request by the  Holder or  Holders  of a  majority  in
interest  of (i) this  Convertible  Note,  (ii)  any  Convertible  Notes  issued
pursuant to the offering described in the Company's Private Placement Memorandum
dated April 9, 1997, as restated on October ____, 1997, and (iii) any Conversion
Shares underlying all such Convertible Notes, the Company will promptly take all
necessary  steps to register or qualify,  under the 1933 Act and the  securities
laws of such  states as the  Holders  may  reasonably  request,  such  number of
Conversion  Shares issued and to be issued upon exercise all of such Convertible
Notes  requested  by such Holders in their  request to the Company.  The Company
shall keep effective and maintain any registration, qualification, notification,
or approval specified in this Paragraph (b) for such period as may be reasonably
necessary  for such  Holder or  Holders  of such  Conversion  Shares to  dispose
thereof and from time to time shall amend or supplement the  prospectus  used in
connection  therewith to the extent necessary in order to comply with applicable
law. Notwithstanding the foregoing, if in the reasonable opinion of the managing
underwriter  of any  proposed  financing  by the Company a  registration  of the
Conversion  Shares  pursuant to this  Paragraph (b) would  adversely  affect the
proposed  financing,  then the Company  shall not be  obligated  to register any
portion of the  Conversion  Shares until such time as the  managing  underwriter
deems it would no longer adversely impact the proposed financing.

         (c) With respect to each  inclusion  of  securities  in a  registration
statement  pursuant to this  Section 10, the  Company  shall bear the  following
fees,  costs, and expenses:  all  registration,  filing and NASD fees,  printing
expenses,  fees and  disbursements  of counsel and  accountants for the Company,
fees and  disbursements  of counsel for the  underwriter or underwriters of such
securities (if the Company is required to bear such fees and disbursements), all
internal expenses, the premiums and other costs of policies of insurance against
liability  arising out of the public offering,  and legal fees and disbursements
and other expenses of complying with state securities laws of any  jurisdictions
in which the  securities to be offered are to be  registered or qualified.  Fees
and  disbursements  of special counsel and accountants for the selling  Holders,
underwriting  discounts and commissions,  and transfer taxes for selling Holders
and any other expenses relating to the sale of securities by the selling Holders
not expressly included above shall be borne by the selling Holders;

         (d)  The  Company  hereby  indemnifies  each  of the  Holders  of  this
Convertible Note and of any Conversion  Shares,  and the officers and directors,
if any, who control such  Holders,  within the meaning of Section 15 of the 1933
Act,  against all losses,  claims,  damages,  and liabilities  caused by (1) any
untrue statement or alleged untrue statement of a material fact contained in any
Registration  Statement or  Prospectus  (and as amended or  supplemented  if the
Company shall have furnished any amendments thereof or supplements thereto), any
Preliminary  Prospectus or any state securities law filings; (2) any omission or
alleged  omission to state therein a material fact required to be stated therein
or necessary to make the  statements  therein not  misleading  except insofar as
such losses,  claims,  damages or liabilities are caused by any untrue statement
or omission contained in information furnished in writing to the Company by such
Holder expressly for use therein;  and each such Holder by its acceptance hereof

<PAGE>

severally  agrees that it will indemnify and hold harmless the Company,  each of
its officers who signs such Registration Statement, and each person, if any, who
controls  the  Company,  within the meaning of Section 15 of the 1933 Act,  with
respect to losses, claims, damages or liabilities which are caused by any untrue
statement  or omission  contained  in  information  furnished  in writing to the
Company by such Holder expressly for use therein.

         11.  Modification and Waiver. No purported  amendment,  modification or
waiver of any  provision  hereof shall be binding  unless set forth in a written
document  signed by the Company and the Holder of the  Convertible  Note (in the
case of amendments or  modifications)  or by the party to be charged thereby (in
the case of waivers). Any waiver shall be limited to the provision hereof in the
circumstances  or events  specifically  made subject  thereto,  and shall not be
deemed a waiver of any other term  hereof or of the same  circumstance  or event
upon any reoccurrence thereof.

         12. Notices. All notices,  requests,  consents and other communications
required or permitted  hereunder shall be in writing and shall be deemed to have
been given,  when  received,  if  personally  delivered  or  delivered by telex,
telegram or telecopy,  or five (5) days after  depositing in the U.S.  Mails for
delivery by first class mail,  postage  prepaid and addressed as provided below,
(a) if to any Holder of the  Convertible  Note,  addressed to such Holder at its
address as shown on the books of the Company,  or at such other  address as such
Holder may specify by written notice to the Company, or (b) if to the Company at
1419 Energy Park Drive,  St. Paul, MN 55108,  Attention:  President,  or at such
other address as the Company may specify by written notice to the Holders of the
Convertible Note or Common Stock issued upon conversion of the Convertible Note.

         13. Successors  and Assigns.  All the terms and provisions of the
Convertible  Note shall be binding upon and inure to the benefit of and be
enforceable  by the  respective  successors and assigns of the Company and
each Holder of the Convertible Note, whether or not so expressed.

         14. Applicable  Law.  The  laws  of  the  State  of  Minnesota  shall
govern  the  validity  of  the Convertible  Note, the  construction  of its 
terms and the  interpretation  of the rights and duties of the Company and each
Holder of the Convertible Note.

         15. Waiver of Demand,  Presentment  and Notice of  Dishonor.  The  
undersigned  and each  endorser or guarantor hereof hereby waives demand, 
presentment, protest, notice of protest and notice of dishonor.

         16.  Corporate  Obligation.  No recourse under or upon any  obligation,
covenant or agreement contained in this Convertible Note, or for any claim based
hereon or  otherwise  in respect  hereof,  shall be had  against  any  promoter,
subscriber to shares, incorporator,  shareholder, officer, or director, as such,
past, present or future, of the Company or of any successor corporation,  either
directly or through the Company or any successor or  corporation  or through any
trustee,  receiver, or any other person,  whether by virtue of any constitution,
statute,  or rule of law, or by the  enforcement of any assessment or penalty or
otherwise, except as expressly agreed to by the party charged.


<PAGE>



         IN WITNESS WHEREOF,  the Company has caused this Convertible Note to be
signed by its duly authorized officer as of the date first written above.


                                  Quantech Ltd.


                                  By_____________________________________
                                  Its____________________________________



<PAGE>





                DATES AND PRINCIPAL AMOUNTS OF CONVERTIBLE NOTES

                       ISSUED TO AFFILIATES OF REGISTRANT





AFFILIATE                                 DATE OF ISSUE              AMOUNT


Gregory G. Freitag                        June 3, 1997            $  10,000

James F. Lyons                            June 3, 1997            $  25,000

Edward E. Strickland                      June 3, 1997            $  25,000

Strickland Family Limited Partnership     June 3, 1997            $  25,000

Robert Case                               June 30, 1997           $  50,000